There was a time when people used to choose general cosmetic products for use. Now, things are different. every individual requires the personalized products as per the skin requirement. Purplle understood this concept very well. if you will go to the Purplle website first time, it will not show you the products directly. the company will ask you to fill a small form related to your skin and hair requirements. once you submit the form, you will get the experience of the personalized products. In a short span of time, Purplle has established itself in the more competitive cosmetic industry.
A Humble Beginning of Purplle
In late 2011, Purplle started its operations in the e-commerce era as an online firm for selling cosmetic products. Manish Taneja, Co-Founder, and CEO of Purplle started his luck second time in the entrepreneurship field. his first startup did not do well and was closed within 2 years. at that time, he was 24. he also worked with Avendus Capital. Manish was an alumnus of IIT Delhi. He started Purplle as a joint venture with Rahul Dash who was an alumnus of IIT Kharagpur., IIM Ahmedabad, and Suyash Katyayani(IIT Kharagpur). at that time, Rahul was working with Tata groups.
When they started the startup, they had no external funding. they used their savings for Purplle initial operations. initially, the trio was confused about the business sector to start with. they shortlisted Furniture and Fashion for the new startup. after a lot of debates, finally, they settled with the beauty industry. they did not choose the furniture area because it needed more investment, whereas Myntra and Jabong’s success motivated them to enter the beauty industry.
Talking about the Cosmetic industry, Manish Says:
“Cosmetic is the highest repeat category, thanks to women with increasing disposable income and exposure to trends. It gives the best margins – about 90 percent in luxury brands and 75-80 percent in the budget category.”
Answering a question related to why they chose the cosmetic industry, Manish further said:
“In 2011, there was no Sephora in India. There were hardly 100 beauty stores, even in Mumbai, and about 10 big beauty centers where salons did B2B transactions.”
Growth of Purplle
Purplle was started with an initial investment of Rs. 40 Lakhs. in the first month, the company saw a sale of Rs. 45000. this sale happened due to family and friends’ support. in the next 4 months, the startup gained momentum with a monthly scale of 30%.
The startup understood the demands of women in the cosmetic field. the company targeted women who have ages in the range of 21-32 years. the startup also studied the offline cosmetic stores’ weaknesses. these stores can’t keep all brands’ products due to the limited space. finally, they push customers to take certain products.
Purplle did the opposite of that. the startup did not force the customers to choose specific brands. it asked their requirements and then products were presented to the customers through its website. due to this, no brand contributes more than 5% in the total sale of Purplle.
“Since we guide 40 percent of our beauty users through a personalized shopping experience, they do not just land on the most-selling brands,”
a few days back, Purplle raised $45 Million from Sequoia and existing investors. During the fiscal year 2019, the startup was near to profitability. 2020 changed the game completely. Purplle revenue was dropped by 14% to Rs. 86.8 crore in FY20. its annual losses surged to Rs. 24.92 crore. It is 512.3% more than the losses in FY2019.
During a recent conversation with Entrackr, Taneja said that the company invested in people, technology, and the market side in FY20 which leads to an increase in costs. He further added that the firm would keep doing that for the next few years to capture the size of the opportunity.